The Financial Industry Regulatory Authority is warning investors that con artists are posing as regulators to conduct investment scams.
FINRA released an Investor Alert Friday stating that fraudsters used FINRA’s name and logo in correspondence — including a fake signature from FINRA President and Chief Executive Officer Robert W. Cook — to create the false impression that FINRA provided guarantees related to an investment opportunity that was, in fact, an advance-fee scam.
Gerri Walsh, FINRA’s senior vice president for Investor Education, stated that FINRA “does not guarantee investments, and our officers play no role in facilitating investment opportunities. We want people to know that and to understand how they can verify who the real FINRA is.”
One scam being conducted is the “common advance-fee scam,” which the broker-dealer self-regulator says “involves enticing investors into sending money to cover administrative or regulatory charges associated with a buyback of shares of stock that are currently virtually worthless or underperforming.”
Once investors send the money, “they never see it again, nor any of the money promised from the stock buyback. Sometimes, the con artist will ask for additional money or simply disappear,” FINRA states.
One investors informed FINRA of a “an official-looking letter, purportedly from FINRA’s CEO, touting a guarantee.”